Summary

• Base is an Ethereum L2 solution developed by the cryptocurrency trading platform Coinbase in cooperation with Optimism. It aims to provide a secure, low-cost and developer-friendly environment to develop on-chain applications.

• Base is compatible with all EVM wallets and Coinbase wallets.

• Base has multiple use cases, including payment apps, token exchange, liquidity supply, token bridging and launching DAO.

What is Base ?

Base is the Ethereum Layer 2( L2) Blockchain. As the first blockchain launched by the publicly traded company, it has received widespread attention from the cryptocurrency community.

Base is developed in cooperation with OPtimism on the Ethereum Layer 2 blockchain OP Stack, and OP Stack is a platform that supports OPTimism A standardized open source development stack. Base allows developers building decentralized applications (dApps) to access Coinbase’s ecosystem, which has 110 million verified users and over $80 billion in assets.

Base's vision is to create a so-called "hyperchain" that uses Optimism technology to improve performance and relies on the input of the developer community support and engagement to realize this vision. Base has publicly announced that it does not currently plan to issue new network tokens for Base, so users should be extra cautious when faced with scammers offering fake Base tokens.

What is Layer 2?

Layer 2 blockchain is a commonly used term in the cryptocurrency field to describe building on an existing blockchain network ( Secondary protocols or frameworks above Layer 1), such as Ethereum. The main purpose of Layer 2 solutions is to improve the scalability, transaction throughput and efficiency of the underlying Layer 1 blockchain without compromising its security or decentralization.

There are several types of Layer 2 blockchain technology, including state channels (Bitcoin’s Lightning Network and Ethereum’s Raiden Network), sidechains (Bitcoin’s Liquid Network and Ethereum’s Loom Network) and rollups (optimistic rollups and zero-knowledge rollups).

The most widely used Layer 2 blockchain networks include Optimism, Polygon, zkSync and Arbitrum.

What is Optimism?

Optimism is a Layer 2 blockchain solution built on the Ethereum network, aiming to improve its scalability, Transaction throughput and lower associated fees. Optimism mainly utilizes a technology called Optimistic Rollups, in which multiple off-chain transactions can be summarized into an on-chain data presentation and submitted to the Ethereum main chain.

Optimism uses a fraud prevention system that assumes all aggregated summary transactions were initially valid. Users can challenge these transactions and submit evidence of potential fraud within a designated time frame. If any fraudulent activity is detected during this period, malicious users will be penalized and transactions will be reversed.

What are the use cases for Base?

Like other L2 networks, Base can be used for a variety of use cases. The following are some application scenarios built on Base.

1. Payment App

Beam is a payment App that allows users to conduct transactions using the stable currency USDC or the App's native token Eco. Users can log in using their Twitter (now renamed to X) account and pay for gas via USDC or Eco. Additionally, Beam includes an integrated fiat-to-crypto and crypto-to-fiat conversion gateway.

2. Token exchange

Go Token exchange on a centralized exchange (DEX) allows users on Base to trade various cryptocurrencies. Currently, several decentralized trading platforms are running on Base, such as Uniswap, Maverick and Dackieswap.

3. Liquidity supply

Users can provide liquidity on the Base blockchain through various dApps such as Uniswap, BaseSwap and Dackieswap. These dApps allow liquidity providers to earn fees from transactions on liquidity pools.

4. Bridge

Base has developed an official cross-chain bridge called Base Bridge, which is compatible with most Ethereum wallets, such as MetaMask or Coinbase wallets. Users are able to bridge ERC-20 tokens between Base and Ethereum.

The bridge from Ethereum to Base usually takes a few minutes, while the bridge from Base to Ethereum takes about 7 days.

5. Start DAO

Decentralized Autonomous Organization (DAoS) is a blockchain-based organizational form that is jointly decided by community members and operated through smart contracts. Aragon, the protocol for creating DAOs, introduces codeless dApps on the Base network, simplifying the process of creating DAOs.

Will Base token be launched?

Base's roadmap and official Twitter profile indicate that they have no plans to issue network tokens in the future.

However, some projects may initially claim to have no airdrop plans, but will conduct surprise airdrops in the future. This is often done to reward early backers who contribute to the network and help grow the community.

How to connect to the Base network and use the test network?

Connecting to the Base network is fairly simple and can be done using the Coinbase wallet or any EVM-compatible wallet.

1. Use Coinbase wallet to connect to Base

To use Base with your Coinbase wallet, please follow these steps:

1. Start Coinbase wallet browsing server extension and log into your account.

2 .Connect to the app using your Coinbase wallet (in this case we will use BaseSwap).

3 .Click the network symbol in the upper right corner to access the network selection menu.

4 .Select Base from the list.

5. The active network is now set to Base

2. Use MetaMask to connect to Base

Users can use many EVM wallets to connect to Base. Let’s give an example of how to connect the Base network with the MetaMask wallet.

1. Start the MetaMask browser extension.

2 .Click the drop-down button at the top of the extension to access the network selection drop-down menu.

3 .Select the [Add Network] button.

4 .Select [Add network manually].

5 .In the [Manually Add Network] dialog box, enter the following details of the Base Goerli test network, and then click [Save]:

6. You should now be able to connect to the Base network in the network selection drop-down section.

What are the benefits of the Base network?

The main benefits of using the Base network include:

1. Low cost

Like other optimistic rollups, Base has low gas fees and is designed to significantly reduce transactions costs and improve transaction throughput. It does this by processing off-chain transactions and consolidating them into a single proof.

2. Accessibility

EVM-compatible chains like Base increase accessibility by enabling developers to easily deploy and leverage existing Ethereum-based tools, frameworks, and smart contracts across multiple platforms.

3. Scalability

L2 scalability provides significant advantages by enhancing the capacity and transaction throughput of blockchain networks. This improvement resolves bottlenecks and reduces inefficiencies, ultimately providing users and developers with faster, more cost-effective solutions.

What are the disadvantages of Base network?

The main limitations and issues related to Base are:

1. Centralization

One of the concerns surrounding Base is its degree of centralization. Coinbase is the only orderer node on Base, which allows them to control transactions to a large extent. A sequencer node is a dedicated node in the blockchain network that is responsible for sorting and completing transactions in a specified order, thereby increasing transaction throughput.

Having a sequencer node centralizes the power of transaction processing and sequencing in a single entity. Additionally, the centralized authority can set and modify fees associated with the Coinbase orderer. Coinbase revealed that it may integrate third-party nodes in the future.

2. Long withdrawal time

One of the main limitations of the Base blockchain is the long withdrawal time, which takes about 7 days. This delay is because Optimism is designed with a fraud-proof system that allows users to challenge transactions and submit evidence of potential fraud within a set time frame.

Long withdrawal times may lead to poor user experience.

3. Security

As an L2 built on OP Stack, Base faces a series of security risks. The first issue arises from the effectiveness of anti-fraud mechanisms as security measures. Fraud proof highly relies on the voluntary vigilance of network participants, requiring them to monitor and challenge any invalid off-chain transactions before completing the transaction on the main blockchain.

However, this mechanism faces various challenges, such as providing sufficient reward incentives for participants to actively participate in maintaining fraud Proof mechanisms, and security vulnerabilities for data concealment attacks.

Conclusion

Base has aroused great interest from all parties since its launch. As of September 7, 2023, it has attracted more than one million users in total, with a total value locked (TVL) of more than $385 million. This incredible achievement propels Base to eighth place in the TVL rankings, surpassing popular blockchains such as Cardano and Solana.

As the first blockchain launched by a publicly traded company, Base is opening up new possibilities in an effort to attract a wider audience and bring more Users are brought into the world of Web3. As the platform continues to grow and evolve, it is still important for users and developers to carefully evaluate and make informed decisions when dealing with Base.

Extended reading

• Blockchain Layer 1 and Layer 2 scaling solutions

• What is Polygon (MATIC)?

• The difference between optimistic aggregation and zero-knowledge aggregation

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